What happens to the 5p for a plastic bag?

Source: HM Treasury | | 06/12/2017

HM Treasury has published an interesting response to a Freedom of Information enquiry that wanted to know what happens to the money raised from the sale of 5p plastic bags by retailers. HM Treasury points out that this charge is not a tax and the money from
the charge does not go to the government. Therefore, the Treasury has not received any income from this measure.

The minimum charge of 5p was introduced in October 2015 on single-use carrier bags supplied by large shops in England. Since then single-use carrier bags are no longer given away free when buying goods from large shops.

Shoppers who bring their own bags or use thicker, reusable ‘bags for life’ do not need to pay the charge. There are also some exemptions on the requirement to charge for bags based on location, bag size, items being carried and specialist bags. In addition,
there are no charges for retailers who use paper bags.

The charge has dramatically reduced the number of plastic carrier bags used in England. In the latest figures published by the Department for Environment, Food & Rural Affairs (DEFRA) it was revealed that the large retailers in England sold 2.1 billion single-use
plastic carrier bags in 2016-17 and HM Treasury has estimated that 9 billion fewer bags have been used since the charge was introduced.

The government expects retailers to use the proceeds of the charge to help fund good causes in England. It has been estimated that around £95 million has been donated to good causes since the charge was introduced.